That’s because it wasn’t remotely Bush’s fault. But to show you how this is an age-old partisan thing, I found a column in the liberal American Prospect from January 29, 2001, headlined: “The Bush Bear Market?”
It’s similarly reasoned, just flipped to the left. But that’s the only “blame Bush” piece I can find until a mid-2002 WSJ interview of George Soros where he called the crash “the Bush bear market.” That was still wildly wrongheaded, and it was seventeen months after Bush had taken office, not forty-one days.
And the Bloomberg story doesn’t even mention the Nasdaq fall under Bush pointing instead that it took eight months for the Dow to fall as much under Bush as it has already under Obama.
“It’s the Obama bear market,” said Dan Veru, who helps oversee $2.8 billion at Palisade Capital Management in Fort Lee, New Jersey. “We don’t know what the rules are in so many different areas the government is touching.”
Bloomberg as an institution doesn’t like the “to be sure” graphs, but it shouldn’t have written this story without one. As a friendly service from The Audit I’ll write them one—gratis!
“To be sure, the stock market’s crash long preceded Obama’s inauguration and election, and the economy he inherited from Bush is in a tailspin not seen for eighty years. And the extent to which Obama’s proposals have impacted the stock market is impossible to calculate.”
And the story doesn’t note that another measure of confidence in the administration, the “right track/wrong track on the economy ” polls and the popularity polls are very positive—far above Bush levels.
I don’t deny that part of the stock decline is most likely to do the lack of confidence in the mixed messages we’ve seen from Obama’s crew so far, but who knows? And get some perspective, as Ritholtz says:
But to hold him responsible for a market collapse on day 41 of his Presidency — following 8 years of gross negligence and ruinous incompetency under the Bush regime — is simply too much stupidity for any damaged nation to bear.
Bloomberg is playing right into partisan hands here with a story that could be a GOP press release. Stock markets go up, stock markets go down (and this one was trending down anyway).
Let’s not confuse correlation with causation. Of all business-news outlets, it should know better.
Turning to Barry Ritholtz for damage control? Too funny.
The reason this is being tied to President Obama is because of his decidedly anti-market moves. If he sat around while Rome burned, then he'd get the same amount of blame as most presidents *honestly* deserve for the general ups and downs of the economy: Not much.
Unfortunately he seems to be actively throwing kindling onto the fire, and he needs to accept responsibility for what that's doing to the economy. If you were in among the investment class, do you think that you would overall be positive or negative with the moves that he's made?
#1 Posted by Stu, CJR on Fri 6 Mar 2009 at 12:04 PM
Stu,
I reallocated big-time away from stocks a year and a half ago, and after a brief and unfortunate re-entry, thinking they surely couldn't go much lower, rode them down 15% to about 8,300, before shifting away again.
Does that answer your question?
This is much bigger than Obama or Bush.
And how do you measure Obama's negative impact versus, say, the fact that it becomes more and more apparent with each passing week that our banking system is insolvent?
#2 Posted by Ryan Chittum, CJR on Fri 6 Mar 2009 at 12:25 PM
But to hold him responsible for a market collapse on day 41 of his Presidency — following 8 years of gross negligence and ruinous incompetency under the Bush regime — is simply too much stupidity for any damaged nation to bear.
Imagine that, Mr Chittum sticking up for Obama.
The fact that the market has tanked since the election, and continues to fall is precisely because the investment community has no confidence in Obama's economic vision. If you think that Bush’s 2-3% deficits were bad, wait till you see prolonged deficits of 10-15% of GDP.
Investors have figured out that tossing bales of $100 bills onto the fire is doing nothing but setting the stage for a rapid devaluation of US currency.
#3 Posted by Phil, CJR on Fri 6 Mar 2009 at 01:52 PM
“It’s the Obama bear market,” said Dan Veru, who helps oversee $2.8 billion at Palisade Capital Management in Fort Lee, New Jersey. “We don’t know what the rules are in so many different areas the government is touching.”
Word to the wise: if you have any money with Palisade Capital Management overseen by Dan Veru, get it out now. Do you really want your money in the hands of someone whose reasons go no deeper than...that?
#4 Posted by Anthony, CJR on Fri 6 Mar 2009 at 04:18 PM
I believe that Mr. Obama is trying to avoid the "Obama Depression," and that he is willing to accept the "Obama Bear Market" in exchange if necessary.
#5 Posted by Hawthorn, CJR on Fri 6 Mar 2009 at 04:49 PM
Let's see here..........was there anyone there with a gun telling our narcissist and chief to run for office? No.........well he better cowboy up with the "plan" , he always says he has a "plan". But, Wall St is street wise and the only thing this smooth talker has brought to the table is a plethora of do nothing wonks that are either not credible or don't pay taxes.
He signed up for the job. Time to walk his talk and in the process, let's not whine about inheritance. Time to be a leader not a coniving socialist acting like he's looking out for the masses when he's only out for his own personal agrandizement. This attitude will take us away from Capialism and maybe to his hidden agenda all along. Do we realy know this guy? What I see does not match the rhetoric, and yeah it's BHO's economy now.
#6 Posted by Paul, CJR on Fri 6 Mar 2009 at 05:36 PM
The artticle states: The Great Depression stock crash didn’t hit bottom until 1933, four years after it started.
This is incorrect at least a far as the DJIA is concerned. The DJIA reached its low on July 8, 1932 at 41.31. The DJIA reached its peak on Sept. 3, 1929 at 381.17. It took 34 months for the DJIA to fall 89% to this level, not 4 years or 48 months.
Yes the President has been in office a little more than 6 weeks. However during FDR's first two months in office the DJIA rose 48% from 52.54 on March 1, 1933, to 77.79 on May 1, 1933 and continued going up for the rest of the year and ended 1933 approximately 52.5 points above its low when FDR took office.
FDR took office following a failed Republican President as did President Obama. Unemployment was more than 3 times the current rates , foreclosure rates were higher, and an environmental disaster was developing on the Great Plains. We all know the New Deal involved radical change including new regulations, higher taxes and deficit spending and yet the market went up after FDR became President.
Although Barack Obama took office under similar circumstances it is unreasonable to expect a similar increase in the market. However Mr Obama was hired to make things better, not worse. In my opinion FDR inspired confidence in investors and the public which led to the markets' spectacular increase. Barack Obama has done the opposite and the results speak for themselves. The stock market has gone down at a faster rate per day from Inauguration Day, than it declined from its high on October 9, 2007 to 1/20/09.
Many people have compared President Obama to FDR, but so far his performance doesn't even come close as far as the stock market is concerned. So far Mr Obama is looking more like FDR's predecessor.
#7 Posted by ejhickey, CJR on Sat 7 Mar 2009 at 01:42 AM
Its simple to me, Obama and gang have backed themselves into a corner. Populist retoric that deamonized SUCCESS-FROM-HARD-WORK got them into office but has also removed the best solution to our economic problem.....Obama's plan to reward failure so that the loosers can do-it-again, will surely bankrupt the USA.....Also, Obama's plan that "More Free Stuff" will fix the problem is an absolute disaster in my opinion....Unfortunately, it looks to me that the real risk that Obama and Gang offer the USA is the new label.....THE OBAMA DEPRESSION.
#8 Posted by Dave, CJR on Sat 7 Mar 2009 at 04:09 AM
If Obama had nationalized $C and $BAC on day one, the cries of "socialism" would have been deafening. Fixing this train wreck will take more than 42 days.
#9 Posted by Grodge, CJR on Sat 7 Mar 2009 at 03:11 PM
"The reason this is being tied to President Obama is because of his decidedly anti-market moves."
so what?
the past couple of years have shown a couple of clear things. one is that "what's good for wall street" is not actually "good for the country". in fact, in the past decade, it has been the exact opposite. what's been good for wall street has only been good for wall street, and now it's not even good for anyone.
the other thing it has shown is that none of these people make decisions that are even remotely sensible. they made a bunch of absolutely godawful decisions for years and ran the country's economy into ground.
so why should anyone be concerned about what these people perceive as "anti-market"? why should anyone be concerned about the investor class' wise wisdom right now?
"pro-market" policies are what brought us into this mess.
#10 Posted by Andy, CJR on Sat 7 Mar 2009 at 06:04 PM
"If you were in among the investment class, do you think that you would overall be positive or negative with the moves that he's made?"
The "investment class" can burn in hell. Trying to aid investors directly, instead of aiding the system as a whole by aiding the workers, is how we got into this mess.
#11 Posted by Regis, CJR on Sat 7 Mar 2009 at 10:58 PM
Here are the facts from Bloomberg:
Since he was sworn in...it is a fact... spin all you want. He is so far a disasater for american savings accounts....
The Dow Jones Industrial Average fell 20 percent since Inauguration Day through yesterday, the fastest drop under a newly elected president in at least 90 years, according to data compiled by Bloomberg. The gauge lost 53 percent from its October 2007 record of 14,164.53, slipping 4.1 percent to 6,594.44 yesterday.
#12 Posted by danmcglinchey, CJR on Sat 7 Mar 2009 at 11:27 PM
G.W. Bush inherited a recession upon taking office in 2001. You can look it up - it followed at some distance the NASDAQ dot-com crash of March-April 2000. That's why he attempted to goose the economy with tax-cut stimulus in 2001-2002. Anyway, I believe it took approximately zero time for that 'recession' to become Bush's, in the eyes of the Democrats . . . they were still blaming the stagnation in job growth on him in the 2002 election campaign, even after 9/11 had occurred with further impact on the economy. I'm not a fan of Bush, but somehow I expect Obama will be held - as he has been already - to lower standards and expectations by his friends online and in the press.
#13 Posted by Mark Richard, CJR on Tue 10 Mar 2009 at 01:48 PM
Mark,
In the post I note that I looked back at how the bear market was connected to Bush. I found one example, in the liberal American Prospect in January 2001. The next was a George Soros quote seventeen months later. As I wrote, those were out to lunch.
There was nothing like this fusillade of Obama blame that has come from the right's (and the somewhat-left of Jim Cramerville) echo chamber and been picked up in the news pages.
#14 Posted by Ryan Chittum, CJR on Tue 10 Mar 2009 at 02:55 PM
This article is even funnier to read 7 months later, when the market is up a ridiculous unwarranted amount. I came across this because I decided to google "obama's bear market" - when the market crashes back down to reasonable levels, i'm sure it's a term we'll start hearing again.
#15 Posted by Chris Fullam, CJR on Fri 23 Oct 2009 at 04:34 PM
And of course Chittum neglected to look at al lthe "Bush is taling down the economy" stories that written in late 2000, early 2001.
http://news.google.com/archivesearch?q=bush+talking+down+economy&scoring=a&sa=N&sugg=d&as_ldate=2000&as_hdate=2001&lnav=hist10
#16 Posted by Mike H, CJR on Fri 23 Oct 2009 at 04:53 PM